A Guide to Managing Your Fear of Money

[Editor’s Note: Kristin Wong penned this article on money management tips even through your fears a couple years ago, but it’s as relevant today as it was then.]

My first year of high school, I was looking for an easy, goof-off elective — a class that would allow me to take a break in between Geometry and English, and maybe catch up on some magazines or take a quick nap. “Debate” sounded right up my half-assed alley.

On the first day of class, I was told we’d have to attend tournaments, in which we’d debate on topical issues. Politics. In front of people. I was a quiet student, and the most I knew about politics was that President Clinton had a cat named Socks. The thought of a debate tournament terrified me. But, because I was also lazy, I chose not to drop the class. I’ll just deal with this fear later, I thought. A few months of classroom training and research went by, and I found myself fairly knowledgeable about current events. Which meant I’d have to participate in a tournament. Which meant I’d have to speak. Publicly. And this was one of my greatest fears, second only to cockroaches.

I vaguely remember that day, standing in front of a panel of judges. The lights dimmed, and I’d just drawn a question on U.S. foreign policy. Even now, writing this, I tremble a little, remembering how small I felt. I couldn’t tell you exactly what I said, or how the judges reacted; I only remember opening my mouth and allowing words to come out. I dealt with it. I did what I needed to do.

Since then, I’ve had to let go of many, many fears. Sometimes, letting go is gradual. I was afraid of money for a long time. It kept me from budgeting, but I got over it. Then, it kept me from investing, and I just recently got over that. Even more recently, I’ve had to deal with one of my greatest money fears — not having a job. It was scary. I wanted to bury my head in the sand. But I dealt with it and did what I needed to do.

Related >> Money and Security: Fear of the Future

For some people, a fear of money can be overwhelming. Here’s what I think you can learn from your fear — and how I think you can learn to manage it.

Why you might fear money

We’ve all got roots, and those roots shape our interests, personalities, and, yep, our fears. If you associate money with problems, it’s probably because money has been a key player in the problems in your life. In college, I hated money. At one point, I worked two jobs and went to school full time, and it was because I didn’t have enough money to pay for my crap. So money = my being exhausted and miserable.

Or, maybe money has been an uncomfortable topic in your life. Maybe you heard your parents shouting a lot about money when you were growing up. Maybe money was a big issue in a divorce. When you associate money with stuff like that, no wonder it’s a taboo topic.

Or, hell, maybe you’re just a natural worrier, like me. Even when things are good, I worry. Actually, especially when things are good, I worry. We could spend all day analyzing why I’m like this, but that’s TMI and, suffice it to say: there’s always a reason for money being scary. And, by its very nature, there’s a lot of potential for money to be associated with scary stuff. Money has a large role in some unsavory things: extortion, Ponzi schemes, child support battles, etc.

Why this fear might hold you back

We’ve talked about this quite a bit, so I won’t dig into it too much deeper. But a fear of money can hold you back in many ways:

It makes you afraid to manage your money, and then your budget gets all crazy and you go into debt.

If you’re terrified of losing your money (like me), it can hold you back from enjoying life. Or it can just make your life less convenient. Like when I was too cheap to buy a new computer for work and wasted hours rebooting and dealing with freezes. I could have been much more efficient, and much less annoyed if I bit the bullet and bought the new computer — which I had even saved up for!

Fear is a strong, emotional reaction, and strong emotions can hurt your ability to make a rational, reasonable decision.

How you can get over it

Here’s what worked for me, along with other input.

Pinpoint your fear

It helps a lot to understand the root of your fear. Recognizing the source of your issue can help you better manage it. Let’s say you’re reluctant to look at your budget. Then, when you think about it, you realize you’re avoiding it because you’re afraid of what money has represented to you in the past. Maybe that budget will be busted. Maybe you’ll see some numbers you don’t like — because that’s happened before. Knowing where your fear stems from can help you cope better. It makes the action digestible too. Knowing the source of something gives you a starting point for progress.

Identify patterns

In Taking the Leap: Freeing Ourselves from Old Habits and Fears, author Pema ChÃ¶drÃ¶n uses a Buddhist principle to discuss fear. This is a practical money site, so I won’t get into the spiritual aspect of it too much. But her overall point is that there are triggers to our fear. And these triggers hook us to a downward spiral of greater and greater fear, until whatever we’re afraid of becomes insurmountable.

“If we catch it when it first arises, when it’s just a tightening, a slight pulling back, a feeling of beginning to get hot under the collar, it’s very workable. Then we have the possibility of becoming curious about this urge to do the habitual thing, this urge to strengthen a repetitive pattern.”

Instead of “strengthening” that downward spiral into greater fear, ChÃ¶drÃ¶n says we should learn to understand the “familiar taste” of a negative pattern.

For example, I learned to do this with my public speaking. In class, when we’d practice for the tournaments, I’d feel a knot in my throat. I’d feel my stomach tightening. I knew what was coming next — thoughts like, What if I say something stupid? What if I trip up? From there, I’d get the shakes, and my face would turn red and I’d stutter a lot.

With money, I have a very familiar pattern when it comes to asking for a raise. First, I realize that I deserve a raise. I put it off. I rationalize it. Well, the company is going through tough times, I’ll tell myself. Then, I get disgruntled.

These are all patterns of fear. Learning to recognize them is important.

But then what?

Face your fear

Once you know why you’re afraid, and you know what happens when you’re afraid, you’re better equipped to face your fear. ChÃ¶drÃ¶n says you should embrace it, even.

“Instead of seeing [your fear trigger] as an obstacle to be overcome, it is more helpful to consider it an opportunity for transformation, an open doorway to awakening. When I realize I’m triggered, I think of it as a neutral moment, a moment in time, a moment of truth that can go either way. What I’m advocating is that in that precious moment, we start to make choices that lead to happiness and freedom rather than choices that lead to unnecessary sufferingâ€¦”

In more practical terms, you’ll have to be “exposed to the stimulus,” says psychiatrist Ash Nadkarni in an interview with U.S. News:

“She adds that if you’re continually exposed to the stimulus, you will hopefully start questioning and rejecting the thought patterns and behaviors fueling your fear.”

This is what I did when I forced myself to budget, every day. When I didn’t have it together financially, the very thought of looking at my bank account made me want to gag. I’d developed a three-step pattern: 1) think about budgeting, 2) gag, 3) do something else instead.

When I committed to managing my fear, I forced myself to look at my budget each morning. The gag trigger was still there, sure. But I changed the pattern.

Related >> Budgeting Dilemma: How Do You Decide What You Can Afford?

Educate yourself

Probably the most helpful tool in your arsenal of overcoming fear is knowledge. After all, it’s power, right? And power gives you control, and control helps you to stop letting your fears take over.

Had I not spent months brushing up on current events, I probably wouldn’t have been confident enough to open my mouth in that moment. What would I have said in my debate? President Clinton is a great sax player? Socks Clinton rules?

In learning to get over my fear of investing, I read pretty much every Get Rich Slowly article on the topic (plus, some other places, ha). I’m certainly not a pro, but investing is a lot less scary to me now. And not only is not scary, it’s actually something I’m excited about, because of my returns.

Focus on the positive

Not being afraid doesn’t mean you’ll never make mistakes. I got over my fear of public speaking (kinda), but I still say really dumb stuff all the time. It’s embarrassing, but I learn from my mistakes, make a note of them, and then move on. For the most part, I try not to dwell too much.

Sometimes, I still make money mistakes too. I overspend, for example. But I learn to deal with it, read up on how to avoid it, and then focus on the positive ways money influences my life: It gives me security. It helped me get rid of debt.

This is just what I’ve found to be helpful. Like most things, you have to do what works for you. But fear seems to be an ongoing theme in my life lately, and I think it’s because I’m learning just how much fear holds me back. I think it’s totally okay to be afraid too. What matters, I think, is how you deal with it. Maybe “letting go” isn’t the best way to put it. Maybe it’s more about embracing and managing your fear. And then, ideally, if you deal with it productively, your fear transforms into something productive.

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I really like what you said about how maybe fear is more about managing and embracing your fear. Never looked at it that way before. I know it sounds much easier than done, but I overcome fear by not thinking about it. But I do agree with identifying your fears. This is random, but what if people have fears that they are not aware of? I get that we need to find the source, but some people just have a hard time or are unaware they NEED to recognize what’s holding them back.

This probably sounds weird but for a long time I wanted to garden (in my head anyway) but I just didn’t really do it. Finally I figured out that I didn’t like to get my hands dirty. So I managed it by getting gloves. I am a much better gardener now.
If you want to know what’s holding you back start paying attention to how you’re feeling. Not everyone is a natural navel gazer. It will probably take you a while to get used to it.

Great article. Money fear can be debilitating for some – example, those wanting to retire but are too afraid to do the math to see if they can (or can’t). They continue on without taking action, instead of making that first step in the right direction.

* See, this is why I can’t have Twitter.
Thank Jesus GRS doesn’t have a character limit. *

This article couldnâ€™t have come at a better time in my life. Two weeks ago I decided to leave the first permanent full-time job Iâ€™ve ever had. Iâ€™ve worked here for nearly 5 years and I love the people but not the culture, the work, or the industry. I liked the pay though and thatâ€™s where my fear kicked in. Although it was by no means big bucks, it was enough that I could regularly save 50% of my income (with the help of a part time job and rental income) and I have not had to worry about money at all for the last 5 years, other than just being concerned with meeting my savings goals.

However that changed when the company was bought out last year, business was moved to the Philippines, and they began laying off entire departments and letting the rest of us know there will be more lay offs in June. I previously scheduled a month off to visit family overseas and would be overseas during the potential layoff. I had a heart to heart with my sister who works at the same company and is also going on the trip and asked if maybe we should hold off on the trip. It really wasnâ€™t an option however because summer was the only time we could go, and if it wasnâ€™t this summer it would have to be next summer. Our grandmother has been sick for some time and we arenâ€™t positive she will last until next year (especially since weâ€™ve been telling her for the last 2 years that we will be coming to visit, and it has been over 10 years since I last saw her). Then my sister said something that drained my fears â€œLets just go. You have the rest of your life to earn money but this might be a once in a lifetime chanceâ€. Itâ€™s not a novel sentimentâ€¦the YOLO mentality has been around since before â€œYOLOâ€, but I always brushed it off as some pithy justification for doing something you know deep down you really shouldnâ€™t be doing. When she said â€œYou will have the rest of your life to earn moneyâ€ I realized that the fear I was holding on to was not that I might be out of a job by the time I get back, but rather that I would never again earn as much money as I am now should I lose that job. I was hanging onto this job because it was supposed to be the big final push to the finishâ€”the finish being the opportunity to choose whatever work I wanted based on nothing other than my desire to do the work because I worked so hard at a job I didnâ€™t like for the financial gain.

However even if I donâ€™t ever earn as much money from one job as I do from this one, I know I am resourceful enough that I can find other methods of earning more money without relying on a single entity to provide that to meâ€¦and Iâ€™ll have the rest of my life to figure out how (ideally). So I saw her â€œYOLOâ€ and raised her a â€œCarpe Diem!â€ and decided to give notice that Monday in order to extend my stay in Africa. I was a nervous wreck the day I handed in my resignation, and didnâ€™t sleep that night, but the next day I felt lighter than I had in ages and I slept like a baby. I realized I can have now what I was working so hard to â€œearnâ€. When I come back I am going to focus on applying only to jobs for the work, without getting tripped up on salary.

Once I was able to convince myself that I am in no immediate danger of losing what Iâ€™ve worked for (house, assets and savings), especially since the full-time job accounted for less than 2/3 of my income, it was a no-brainer to take this calculated risk. Any extra benefit I would get from eeking out 2 more years from this job (which might not even have been a choice) seemed to pale in comparison to the benefit of starting the care-less existence Iâ€™ve been working towards, a little bit earlier than planned. My last day is Friday and Iâ€™m already looking forward to Monday :). Thatâ€™s a new feeling! While this may all seem like a crap way to get rich slowly, I know myself and I know that when I am allowed to have an unencumbered mind, I can come up with some pretty cool things, so I donâ€™t think itâ€™s a stretch to view this as an investment in my potential, including my potential to earn future income.

This is fantastic! Thanks for addressing a fear that isn’t commonly addressed. I have to encourage friends to manage their money before it turns into a disaster. It is so important, and the fear can be worked out.

Gah, fear! It’s such a complicated emotion, isn’t it? I’ve been fairly introspective about my own life over the last few years and am trying to recognise and overcome the part that fear is playing in my life.

I am 35, a single woman, and have a successful ‘career’ (more on this below) that pays me a ridiculously high salary. I have always kept a very large buffer in my finances, so I’m scared to give this up.

I work in Oil and Gas, but it’s in severe decline here in Melbourne. My global company always wants me to move overseas to work… but I realised what’s holding me back is that I’m afraid to do it on my own with no supporting partner. I have moved three times on my own before and know how hard and lonely it can be. As a single person, my wonderful close friends and community are what make me happy in life, so I’m scared to give that up….. yet the scary leap I took in my early twenties to live in Germany alone was an extremely happy time in my life.

A friend of mine recently went through a 5 month period of unemployment, which ended when she got a short term contract. After a few months I asked if she had any more job security and she said that it was still month to month on the contract. But she didn’t care because she’d learnt that if she could get through 5 months of unemployment, a month to month contract was nothing. I found myself being wildly jealous of this resilience that she had developed!

So, I’m realy struggling with decisions about fear and concepts of happiness. Whilst I don’t want my decisions to be driven by fear, equally I am very focussed on honestly assessing what makes me happy in life. Do I prioritise career and make a choice that overcomes fear in that realm and go overseas? Doing this means giving up the things which I have identified as making me happy – local dear friends and family, my lifestyle, sporting teams etc.

I’m not sure what the answers are, but here’s what I am doing for now:

Fear 1: Apply for other jobs! I’ve been at this company for 11 years and I really need to test the fear that I can’t get a different job
Fear 2: In paralell to job search, enrol in MBA to try and broaden skills and remove fear that “I can’t be employed in any other field in Melbourne”
Bonus Fear 3: Try internet dating again? Get over my fear that I’ve screwed up my life by not finding a partner and having kids by now

Oy, I can so relate to this. But that bonus fear sounds like a real bummer! I wish I had an easy answer. Brave, 20-something Kristin says: “Do it! Do it! Let go and try to do everything you can in life. You might regret it if you don’t!” But slightly older (slightly more experienced and tired) Kristin says: “Meh, who cares what road you take? As long as it leads to your being happy. Also, I wanna take a nap.”

Overall, though, my impulse leans toward pursuing dreams and not being held back by fear. I think it’s a totally different thing to want to stay because you love being near your family and friends, though.

I’m not sure what the answers are either, but for what it’s worth, it sounds like you’re on the right track. You’re doing stuff. You’re working toward something that you want to do. And you certainly aren’t screwing up your life by not having a partner/kids. But that’s a whole different topic. :)

A lot of people are not wealthy because they do not make enough money, they do. Its just that their psychological programming leads them to lose it, or spend it, or somehow they are just not able to keep it. The face is that much of the fears of money must be removed before someone can learn to keep money as any idiot can make money, its takes a wise person to keep it.

I believe most people have such thoughts of fear especially in college, picking easier course requirements to obtain easy credits but then you realize it is not as easy as it seemed to be. For instance in my college it is a requirement to take a course to boost public speaking skills. Being a freshman, this was my was one of my biggest fears; having to stand in front of people to present information or an idea. Getting over the fear came gradually, when I realized that I was not alone and got the support needed.
Thankfully, I have been able to reduce it to the barest minimum.
My fear of money is not having any or the idea of being ‘brokeâ€™. I restrict myself to my most pressing needs and it is clearly suffocating me. Even after identifying this situation it is taking me a while to figure out how to balance such an issue.
Great article Kristin.

One of the best/strangest/idiotic (take your pick) piece of advice I once read with regard to reducing ones fear of money, and which worked for me, was to start carrying quit a lot of cash money in your wallet and NOT spend it. It has to be a meaningful amount which makes you nervous. I carried 500 dollar around with me for years. And I really got used to that money being there and me not using it. As I said, it worked for me.

this article really speaks for me. i have a lot of fears before and at times will hyperventilate thinking that i am getting old and no savings even though i was only 37yrs old then. however, when i bought my own place nearly 5yrs ago on mortgage i found that i don’t have those feeling anymore. though, still not completely happy because i still have some attitude towards money that needed readjusting but i am more happier and content. i am also looking forward for the future that hopefully in 5 years time would be able to buy another small place to add to my portfolio.

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My name is J.D. Roth. I started Get Rich Slowly in 2006 to document my personal journey as I dug out of debt. Then I shared while I learned to save and invest. Twelve years later, I've managed to reach early retirement! I'm here to help you master your money — and your life. No scams. No gimmicks. Just smart money advice to help you get rich slowly. Read more.

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